All eyes are on the US Supreme Court as they deliberate whether or not to repeal the Professional and Amateur Sports Protection Act. The New Jersey sports betting case will have drastic ramifications one way or the other, and sports betting may still be legalized even if they rule in favor of the major sports leagues. New Jersey has been alone in the fight for some time now, though several states were monitoring how things played out, biding their time until ready to leap into action. 5 additional states have since passed legislation that will activate once PASPA is repealed. The legislation is preemptive in nature, but the odds are leaning in favor of legal sports gambling.
A Brief History Of The NJ Sports Betting Case
In 2014, New Jersey Governor Chris Christie made a bold move by signing a bill into law authorizing several of its brick-and-mortar casino locations to offer sports wagering options. This move circumvented PASPA, which did not sit well with the NFL, NBA, NHL, MLB and NCAA. The sports leagues filed a federal lawsuit and the government quickly shut down the ambitious proposal.
New Jersey refused to let the prospect of legal sports wagering go. They decided to go all in on their chances and appealed the federal government’s action in the lower courts. The Garden State was hit with speed bump after speed bump in each case. Instead of backing down, the state went for a Hail Mary play in appealing to the US Supreme Court. SCOTUS rarely takes on cases like this, especially when there have already been rulings in lower courts. The Supreme Court enlisted the help of the acting Solicitor General. After hearing arguments from both sides of the debate, the SG recommended that SCOTUS not hear the case. SCOTUS went against the recommendation and decided to take on the case. This led to a surge of optimism from New Jersey and other sports gambling advocates.
Arguments From Both Sides
Oral arguments were heard in December 2017. New Jersey’s chief argument was that PASPA is a direct violation of states’ Tenth Amendment rights. New Jersey alleges that the federal government is overstepping its boundaries in denying states the right to host sports betting. The market has changed drastically since the law was passed in 1992 and states could benefit off the revenue.
The major sports leagues argue that sports betting jeopardizes the integrity of their leagues. If PASPA is repealed, there is a possibility of tampering and other illegal activity that will compromise their brands. They seem to have a tougher case to argue, but the major sports leagues are dug into their logic, or so it seems.
A Change In Tide?
In an interesting turn of events, some sports leagues have expressed support for legalizing sports gambling, just under their terms. The NBA and MLB joined forces in publishing a doctrine that calls for “integrity fees.” These leagues want 1% of all gross revenue from each state with betting options. They’ve lobbied hard for this in states like West Virginia, but seemingly to no avail. The leagues claim that the games they put on are their product, or better yet, their intellectual property. They claim that these integrity fees will offset the immense costs of putting on games, special events, etc.
Many state lawmakers do not agree with this notion. Connecticut, for example, heavily scrutinized league representatives on why they feel entitled to these integrity fees, which are basically glorified royalties. The NFL, NHL and NCAA have remained quiet on the issue, but it is safe to assume they will tag along in pursuing this. The MLB released a statement after West Virginia passed a sports betting bill without these integrity fees written in. They said they want the state to reconsider this law and try to keep an open mind.
The potential looming issue is their influence. For example, WV Governor Jim Justice didn’t sign the bill. It actually went through due to inaction. Justice released a statement echoing the sentiments expressed by the sports leagues. Not trying to throw Justice under the bus, but this could mean that he’s in the MLB and NBA’s pockets. States must be aware of how far the leagues will go to get their way and with the amount of money and influence they have, it may be hard to say no.
Which States Are Ready To Go?
New Jersey is the crusading state in the fight for legal sports betting. Their original 2014 legislation is what set this whole thing off, but they’ve also passed a bill in 2017 that would see all of the sports betting regulations stripped. This is their “nuclear option” just in case PASPA is not repealed. It would probably lead to another legal battle, but it is more of a backhanded slight towards the federal government.
New York passed legislation that allowed for a widespread gambling expansion. They were one of the first to introduce legal online poker and casino gaming. Their Gaming Economic Development Act authorized 4 new casino locations. If PASPA is repealed, each of these will be able to offer sports betting.
West Virginia recently passed the Sports Lottery Wagering Act, much to the chagrin of the NBA and MLB. The bill managed to make it into law thanks to Governor Jim Justice not signing or vetoing it over the course of 5 days. Justice did issue a statement urging lawmakers to look at the positives of bringing in the major leagues (“integrity fees”), so it is possible this legislation may be revisited soon. For now, WV is poised to offer sports gambling if PASPA is repealed.
Mississippi passed a DFS bill in 2017 with wording that allows for brick-and-mortar sports gambling should PASPA be repealed. Their Gaming Commission would be in charge of overseeing the industry. There was another bill introduced to repeal all sports betting laws in Mississippi, but it did not gain any traction.
Pennsylvania is another state that brought in legal online poker and casinos. Sports betting was included in the law’s language to complete the overhaul. Again, this legislation relies on PASPA’s repeal, but the state has a large sports betting market with both the 76ers and Eagles on the rise.
Connecticut’s Department of Consumer Protection will regulate the sports betting industry should it be allowed to form. This legislation was part of a DFS bill, though the sports gambling part will kick in once triggered by PASPA’s repeal. CT is another state that stood up to the major leagues, which bodes well for others looking to avoid paying integrity fees.
All these states are relying on SCOTUS to rule in favor of New Jersey and remove PASPA from federal law. If NJ loses, these states will likely engage in a similar legal proceeding, thus creating another long cycle of legislative discussion. In any case, they’ve taken strides in implementing a nationwide sports betting market. These 6 states will soon be joined by many others in offering legal and regulated sports gambling options.